Example of positive and negative divergence

Divergence occurs when the RSI is increasing and the price movement is either flat or decreasing. Conversely, divergence occurs when the RSI is decreasing and price movement is either flat or increasing.

A bearish (Negative) divergence occurs when the price makes a higher high and RSI makes a lower high. As in the first case. we can see a significant price fall after that.

A bullish (Positive) divergence occurs when price makes lower low or maybe at the same level in some cases and RSI makes a higher low. We can see a price rise after it.


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